California Pizza Kitchen Inc. revised its second quarter earnings outlook again, this time upward, on better-than-expected same-store sales.
The company said Tuesday it now expects to earn 15 cents to 17 cents per share for the July 4-ended second quarter, up from a previous range of 10 cents to 15 cents per share.
The new outlook is based on a 4.6-percent decline in second-quarter revenue to $163.1 million and a same-store sales drop of 5.9 percent, compared with a 6.5-percent decline in same-store sales a year ago.
California Pizza Kitchen's stock price rose nearly 9 percent on the news Tuesday, closing at $16.04.
The Los Angeles-based company last month slashed its earnings guidance from an earlier range of 24 cents to 26 cents a share. At the time, the company had projected same-store sales declines of 6 percent to 7 percent, compared with an earlier estimate of a 0.5 percent to 2.5 percent decline.
Co-chief executives Rick Rosenfield and Larry Flax blamed the slow sales on comparisons with strong results in last year’s second quarter because of a popular Thank You Card program that offered guests prizes for return visits.
The program was not held in this year’s second quarter, but California Pizza Kitchen said it will be launched July 28 and will include a grand prize of $100,000.
Analyst David Tarantino of R.W. Baird & Co. estimated that the lack of a Thank You Card program in this year’s second quarter impacted the chain's same-store sales by about 4 percent, but he projected that the program is likely to help sales comparisons turn positive in the third quarter.
Tarantino added that California Pizza Kitchen's stock is likely to benefit in the near term from the prospect of a buyout. Earlier this year, California Pizza Kitchen announced it was exploring strategic options, which could include a possible sale.
California Pizza Kitchen Inc. operates 206 restaurants under the CPK, ASAP ad LA Food Show Grill & Bar brand names, and another 54 are franchised or licensed. The company said it would report full second-quarter results on Aug. 5.
Contact Lisa Jennings at [email protected].